CRYSTAL LAKE – Crews began tearing down a crumbling former car dealership on Route 14 this week to make way for a white, modern, standalone Volkswagen dealership.

Anderson Motor Co. plans to build a 30,494-square-foot sales and service center at the site of former Conlon Collins Ford building at 5213 Route 14. Crews plan to raze the structure in the coming days and weeks.

Anderson Motor Co. will relocate its Volkswagen operations from its multi-brand dealership on Route 31 to the new dealership on Route 14. It’s set to open either late this year or early next year, said Paul Vance, general manager of Anderson Motor Co.

Initially, Anderson Motor Co. had considered renovating the building, but ultimately decided against it.

“It was too dilapidated,” Vance said. “It wasn’t cost effective.”

Crystal Lake has pledged the company up to $1 million through a sales-tax incentive deal to help with the project. The expansion will bring jobs and sales tax revenue to the city and improve what has been a blighted area along the city’s main commercial corridor.

Earlier this month, the Crystal Lake City Council signed off on final plans for the site, which had become an eyesore following years of neglect. The council granted zoning variations for landscaping and lighting for the dealership. The lighting will be “almost exactly” as bright as the Pauly Toyota dealership on Route 31, according to city documents.

“We’re very excited about their plans,” Mayor Aaron Shepley said. “They are a good community partner and we’re happy to have them on Route 14.”

Anderson planned to spend $6.4 million on the project, which includes the cost of purchasing the property. Under the city’s Enhanced Sales Tax Incentive Program, Anderson stands to recoup half of what is generated from both the new dealership and its existing one at 360 N. Route 31 for up to 10 years or until it reaches $1 million.

Assuming a 3 percent to 5 percent annual increase in sales, city officials previously said $1 million can be reached in nine years. In 2011, Anderson Motors reported $20 million in sales that generated $207,000 in sales-tax revenue, according to the city.

If the dealership closes, it would have to refund the incentive money. The agreement also prohibits Anderson Motors from opening a competing dealership within 10 miles.

The former Conlon Collins Ford building has been vacant since 2007. After a change in ownership, it was briefly called Extreme Ford.

Anderson Motor Co., through a company called 5200 Properties LLC, bought the decaying automotive center for about $2.5 million in 2011. In 2005, the same 5.8-acre property sold for $7.2 million – nearly three times as much, according to state and township records.

The new dealership could employ 60 people, though not all of those will be new jobs.

Moving its Volkswagen flag to Route 14 will give Anderson more room for its BMW and Mazda operations on Route 31, Vance said.

“We’ve needed more room for a while,” he said, adding that strong sales from both brands would make filling up the extra space easy.

Vance praised the city council and city staff for their help on the project.

The city has made an effort to keep car dealers happy. Dealerships account for a large amount of the money the city collects in sales tax revenue. The City Council previously approved nearly identical sale-tax incentive agreements with M’Lady Nissan and Brilliance Honda.